What incubators can do to become engines of job creation in post-COVID world

 During our 74th Independence Day celebrations, the Prime Minister extolled the nation to become ‘Aatma Nirbhar’ so that we produce in India -- for ourselves and the world. Implied in his message is the need to nurture local innovation and enterprises to bring about the much-needed impact in health, education, and employability. The government’s renewed focus on innovation and entrepreneurship is expected to fuel the ambitions of our youth and develop new generations of job-creators.

The Indian startup ecosystem at large, and our incubators in particular, will have a large role to play in making this dream happen. Already, a growing number of academic and private incubators and accelerators, many supported by NITI Aayog’s Atal Innovation Mission and the Department of Science and Technology, are serving as catalysts in this movement. These incubators provide much-needed business mentoring, domain advice, customer connects, and investor introductions to startups.

To contribute to national development, our incubators need to focus on the following areas:

Incubators must be inclusive and impactful

While we have exemplars like Deshpande Startups (Karnataka) and ALEAP (Hyderabad) that focus on rural and women-centric ventures respectively, for a country of the size and variety of India we will need incubators in every district that leverage the local knowledge/networks and provide global access to local entrepreneurs. In the final analysis, an incubator’s success is equal to the success of the startups it supports. So, in addition to input/process measures like number of programmes/cohorts/mentors/investor/graduates, incubators must develop management dashboards that help them track outcomes as well, e.g., startups that still exist after one year, funds raised, number of jobs created, etc.

Improve engagement with quality mentors

Most accomplished entrepreneurs will cite the timely and relevant support (and confidence) that they received from their mentors as a vital ingredient of their success. While incubators often have a large set of mentors listed on their websites, very few of them are active, and even fewer are effective. Startup mentoring is an intense activity that requires a deep commitment from both parties. Incubators need to cast a wider net (e.g., covering host institution’s alumni/faculty, incubator alumni, local SMEs) to attract mentors, and create mechanisms to select and train mentors. Also, incubators and startups need to realise that often a combination of two or more mentors – covering strategy, industry, and technology, does the trick.

Self-sustainability

Most university-linked incubators depend on government or industry grants, and host institution’s funds to meet their operating expenses. This is an acceptable ‘seed’ support for the first few years of an incubator’s life, but they must proactively become “aatma nirbhar” themselves through relevant independent revenue sources like corporate training, joint projects with local industry, corporate innovation partnerships, sponsorships, events, etc. Fundamentally, incubators must think of themselves as ‘startups’ and develop a discipline of generating revenues, managing costs, and offering value at scale.

Technology-enabled scalable support

Many incubators have a large ambition but are limited by their resources, and sometimes, by their mindset. Hence, they are only able to support a limited number of startups each year (in cohorts or independently). The reality is that with decades of learning from successful and failed startups, a vast body of knowledge exists that incubators can leverage to provide support to a much larger number of startups. Incubators need to leverage technology for providing ongoing evaluation, context-sensitive tools, and timely mentoring to help hundreds, and not just tens, of startups.

The current health crisis and geo-political conditions are a clarion call for incubators to collaborate more with each other, and for them to support each other in becoming viable engines of job creation, family well-being, and economic prosperity.

Ajay Batra is Executive Vice President – Wadhwani Venture Fastrack at Wadhwani Foundation.